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Management & Finacial Accounting

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26 July 2008 Please send me the journal entry for converting the capital asset to stock in trade.

26 July 2008 1

28 July 2008 Purchases
To Stock in trade


A note on the conversion is to be given in the Notes to Accounts. The rate of conversion shall be mentioned in the said note. It is worth mentioning that the profit or loss in such conversion will be taxed in the year of ultimate sale. The profit upto the date of sale shall be a capital gain and it will be the difference of cost and the market rate as on the date of conversion.




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